Deborah
Knuckey's passion is traveling. She's been to more than 40 countries, and even
took her mother with her to Italy for cooking school.

She wasn't born with a lot of money, and she didn't win
the lottery.

She has a spending plan. You might call it a budget. She
doesn't.

A
money coach and author, Knuckey says she doesn't even use the word "budget"
when she counsels people because of its negative connotations.

"The word 'budget' says self-deprivation," she says. "The
way I approach, I talk about creating a spending plan and start from, 'What
do I want to make room for?' Start with what you'd really like to spend and
how you can create that space. It's not about being frugal. It's about saying,
'What's most important to me and how do I get there?' "

OK, so you can say budget, but think spending plan.

Just like eating right and exercise, just about everyone
understands the value of a spending plan or 'budget'. But unlike nutrition and
exercise, most people don't get an education in money management.

"Most people don't budget properly because they're not
taught to," says Howard Dvorkin, president of Consolidated Credit Counseling
Services in Fort Lauderdale, Fla. "There are no courses I know of, especially
in the high school level. A lot of families purposely don't talk about finances;
I think that's extremely detrimental."

On the right track
All the experts say that the place to start is to track every expense, even
snacks from vending machines and change put in parking meters, for a month.
The process itself is time-consuming at the outset, but it's not difficult.
On one chart, write down all your income. On another, write down all your expenses,
broken into categories for fixed expenses like the house and car payments; flexible
expenses that vary each month, including the phone and electric bills; and discretionary
expenses, such as gifts and recreation.

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Compare the two lists, see where the gaps are, and adjust
accordingly. Now, be surprised at what you find.

"Obviously, this is theory and easier said than done," Dvorkin
says. "Tracking every nickel is a big process and a lot of people don't do it.
You can make the best budget, but if you don't track it, what good does it do?
In my house, every month, we compare the actual to the budget. It's not fun.
My wife hates me for it. But you have to track what you're spending."

But writing down where the money actually goes can be a
major eye-opener for many families.

"A lot of people say after they do the tracking, they didn't
realize the little piddly things really add up over the course of a month,"
says Barbara O'Neill, a certified financial planner and family and consumer
sciences educator at the Rutgers Cooperative Extension Program.

"I've even had people tell me it was the impetus to quit
doing something, like smoking or playing the lottery. When they saw it was such
a large amount, they realized that could be the extra $100 a month they were
looking for. They had never thought of it as $100 a month, it was just a couple
of bucks a day."

Rules one, two and three
Knuckey says she asks people to follow three rules -- live within their means,
take care of their future and "maximize their pleasure," which could mean different
things to different people.

"It might be sending your kids to college, buying a certain
sports car or taking a vacation," she says. "It doesn't have to be frivolous;
it just has to be in line with your values."

Families have different expenses today than
in the past. Twenty years ago, most households had one phone and long-distance
phone calls were for special occasions. Today, it's not uncommon for families
to have two or more phone lines, plus cellular phones and pagers. They might
have a cable modem or DSL, plus the cost of their Internet service. What used
to be a $30 to $50 monthly expense can easily run more than $200 today.

Computers, with software and peripherals such as printers,
modems and scanners, are another line-item that didn't even exist on our parents'
household budget sheets. The easy availability of credit and online shopping
have made it easier than ever to spend beyond our means.

Along with high-tech expenses have come some Internet-based
resources. Quicken,
the money management software, offers a MyFinances section on its Web site to
track all your financial information. Most cooperative extension programs offer
family financial planning information; the Rutgers University program has a
set
of tools at its Web site to help families plan out their goals.

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